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FAA: Amazon Delivery Drones Not Banned After All

Following news Monday that the Federal Aviation Administration had banned Amazon (NASDAQ: AMZN) from using unmanned drones to deliver packages, clarification from the FAA, reported by CNET, now seems to indicate such was not the case at all.

Monday’s news referenced an FAA document that seemed to specify Amazon, although it did not name Amazon Prime Air by name. In the document, under a graphic listing banned uses the agency listed “Delivering of packages to people for a fee.”

After news reports first suggested the new FAA guidelines were a setback, Amazon spokeswoman Mary Osako told CNET, "This is about hobbyists and model aircraft, not Amazon." Saying the rule doesn’t apply to commercial entities, Osako added that it "has no effect on our plans."

Related Link: Amazon's Jeff Bezos: Drone Delivery is Coming

Amazon originally had said, "Putting Prime Air into commercial use will take some number of years as we advance the technology and wait for the necessary FAA rules and regulations."

Amazon Prime Air, announced in December by CEO Jeff Bezos, is a service that would allow shoppers to receive small (five pounds or less) packages via drone. Bezos said he did not expect FAA regulations to be in place any earlier than 2015.

A recent flurry of accidents involving unmanned model aircraft and the FAA reaction to those accidents seemed to put everything on hold. Amazon said that despite what seemed to be an obvious reference to Prime Air in Monday’s guidelines, that was not the case.

The FAA has now said it agrees with Amazon and Prime Air does not fall under the most recent FAA order.

FAA spokeswoman Laura Brown told CNET that the new rules apply only to hobbyists. According to Brown, hobbyists “using a model aircraft to move a box from point to point without compensation” would be okay; accepting a fee would not.

Brown added that this rule would not affect Amazon’s plans for a drone delivery fleet in the United States.

Numerous pundits have weighed in on Amazon’s Prime Air program, many of them calling drone delivery a “gimmick.” Commentary has ranged from calling the drone concept “nonsense,” to a somewhat less cynical opinion that the move was designed to start public debate on what could be a gigantic disruption in the package delivery segment.

Nonsense or disruption, it appears that the Federal Aviation Administration has not decided to kill the concept before it gets off the ground.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

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